Apple Creating Chip-Tech Brain-Tank, but Why?

When a big technology company begins gathering a specialist group of experts together, in some cases poaching them from key posts in other successful outfits, it's a strategic maneuver. In this case, it's the famously secretive Apple, and the experts are all connected to chip design. But why would Apple want to get into the chip-making business?

First, some background: The most recent news concerns Raja Koduri, currently Chief Technical Officer of the "Graphics Product Group" at AMD, Intel's main rival and maker of CPUs. He's apparently due to leave AMD and join Apple soon, according to The Inquirer. It makes sense, given that Bob Drebin—Koduri's predecessor at AMD—has already been hired by Apple. Is this a one-company vendetta against AMD's graphics capability? Not at all...

IBM's Mark Papermaster also feeds into this story. IBM's legal feathers were ruffled after Apple hired Papermaster away. He was head of Big Blue's blade server division, but his earlier role as key driver in IBM's PowerPC product is most likely what Apple was after. The PowerPC was the main chip in Apple computers for years, until the switch to Intel in 2005. It's possible that Apple is interested in Papermaster's PowerPC expertise, but more likely they're using him to drive the development of in-house Apple chips.

All this technical and management expertise would be going to waste if Apple didn't have a nascent chip-production capability, of course. Lo and behold, there's the 2008 Apple acquisition of PA Semi, an entire company dedicated to specialist chip design. That brings expertise in high-power, but power-efficient semiconductor architectures.

The Wall Street Journal also did some digging and discovered that around 100 chip engineers from such prestigious companies as Intel and Samsung have recently begun working for Apple.

Let's recap: Apple's chip-tech brain tank includes two experts in graphics processors, a key figure in CPU technology, a bunch of chip engineers, and a whole company dedicated to power-efficient chip design. It looks like Apple is planning on making key semiconductor components in-house. And the product will most likely be graphics processors, given the two most recent hires, and the fact that Apple's coding team is already busy writing for Intel's CPU platform. A switch to its own CPU architecture would be unnecessarily complex—although not out of the question.

The likely destination for the new chips would be handheld devices. The words "power efficient" in PA's history say it all, and the fact that there are a number of existing graphics solutions for desktops and laptops from the likes of NVidia—and going to the mat against them would be costly.

Then again, there has been a recent spate of graphics-related problems stemming from the NVidia chips in MacBook GPUs. And Apple is known for doing things in-house, where it can tightly control the interactions between various hardware components and its software. That would keep a lid on costs, for one. And Apple has a huge war chest at its disposal, over $18 billion in cash.

Perhaps Apple's own GPU/CPU chips will turn up in iPhones, Mac Tablets and MacBooks over the next year or so. But it's not clear yet exactly how these moves will play into Apple's long-term strategy. but the results will no doubt be fascinating.